Peter Lewis Leaves Democracy Alliance, The Liberal Donor Network

WASHINGTON -- Peter Lewis, one of the Democracy Alliance's founding billionaires, has dropped out of the influential liberal donor network, people familiar with his decision tell HuffPost.

Lewis, the eccentric and reclusive founder of the insurer Progressive Corp., is one of the biggest donors in Democratic and liberal politics. He invested $25 million in the failed effort to oust President George W. Bush in 2004, making him one of the biggest donors in American political history. He coordinated his giving that year with billionaire George Soros, who gave $50 million.

Both Lewis and Soros have backed the Democracy Alliance since its founding in 2005. Lewis' exit from the network did not come as a major surprise to people familiar with him, as he has gradually disengaged from the group in recent years. But the departure of a billionaire of his status is still a blow to the organization, both in fundraising terms and in perception within the liberal donor community.

In February, HuffPost reported that the Democracy Alliance had changed its donation strategy and dropped some progressive groups from its top tier, raising concerns that the group was aligning itself with organizations closely tied to the White House, such as the Center for American Progress and Media Matters for America, at the expense of groups that challenge the Democratic Party to be more progressive.

In a private email to donors, forwarded to HuffPost, the group vigorously defended its new strategy and rejected the suggestion that it was focusing only on electoral politics.

"As news of our new funding approach and 2012-2014 Portfolio has been getting wider attention, a handful of Partners and friends have inquired about how the news is being received, and particularly have called our attention to yesterday’s Huffington Post story that has been making the rounds. Because similar stories may be showing up in the coming days and weeks, we wanted to reach out to you directly," the group's chief, Kelly Craighead, wrote. "Our focus is on continuing to build the foundation for sustainable and long term progress. We understand that elections are a critical element to that, but our hallmark in the broader funding community is that we understand that progress requires more than investing in the ephemeral cycles of elections. We understand that progress is only possible through long term commitments of support to the building blocks for an ecosystem of change."

The group held a conference call with donors on Tuesday to discuss the funding decision.

Democracy Alliance "is a membership organization and has the same modest turnover as any membership organization. Some old partners leave, new ones are recruited," a person close to the Democracy Alliance told HuffPost in response to Lewis' departure.

The $25 million that Lewis spent on electoral politics in 2004 was more the exception than the rule of his giving, which has tended to focus more on the long game and less on the day-to-day partisan warfare. Lewis, 78, remains chairman of Progressive. He is an outspoken opponent of the drug war and has spent millions on efforts to curb it and to legalize marijuana. (Full disclosure: This reporter worked at Lewis' Marijuana Policy Project in 2004 and 2005.) Lewis has been a major donor to the American Civil Liberties Union -- so much so that the group's head offered to name its Washington office after Lewis.

That focus on backing long-range, principled projects aimed at expanding what is possible may help explain Lewis' decision. Jennifer Frutchy, who advises Lewis on on his philanthropy, didn't return a call requesting comment.

The source close to the Democracy Alliance defended the group's funding decision. "The current portfolio recommends a number of leading progressive integrators -- groups that are conveners and facilitators of cooperation that create operating efficiencies and cost effectiveness -– and innovators -– that are utilizing new technologies to gather and analyze data, inform, organize, mobilize key constituencies and which facilitate social networking. The partners of the DA are committed to focusing their finite resources on capacities that reach the most people and produce the greatest aggregate impact," he said. "The process of selecting this portfolio was led by the board and an investment subcommittee and reviewed periodically by the partners at the DA conferences, during conference call briefings and regional meetings. On balance, there was significant partner input in the rationale, selection process, deliberations and final decision-making. As a result, there has been a very high level of partner support for the make-up and focus of the new portfolio."

UPDATE: March 21, 2:20 p.m. -- Earlier this month, Politico's Ken Vogel reported that Lewis was considering leaving the Democracy Alliance over concerns that it had become too partisan.

"Peter is right now reconsidering whether he is going to continue being a partner in the Democracy Alliance,” said the source, stressing that Lewis "reconsiders his involvement with the DA every year." Lewis skipped the conference at which Biden spoke, as well as the Obama fundraiser hosted by McKay and other DA members, which the source said Lewis considered "a step away from their original mission."

The source explained "Peter's focus since 2004 has been on scaling up the progressive infrastructure, as opposed to election or political candidates."